This story by Annie Gilbertson of the Los Angeles NPR station KPCC reported a serious problem for the Gulen-related Magnolia charter chain.

“The Los Angeles Unified school district is investigating a network of eight charter schools for misuse of public school funds.

“An audit showed Magnolia Public Schools used classroom cash to help six non-employees with immigration costs. The schools had trouble justifying another $3 million expense.

“These are taxpayer dollars, and we want to make sure they are spent correctly,” said José Cole-Gutiérrez, director of L.A. Unified’s charter school division.”

“For years, the Magnolia’s books and bank account didn’t match.

An audit in 2012 based on a sampling of transactions found $43,600 missing from accounts: school records showed double payments made to vendors with duplicate invoices attached.

“There was an increased risk of inappropriate or unauthorized expenditures to remain undetected and a potential risk of fraud, abuse and misuse of public funds,” read the 2012 report.

“L.A. Unified officials have refused to release the follow-up audit concluded in June 2014….

“The letter, published by local education blog L.A. School Report, said Magnolia spent $3 million over four years to outsource governance tasks such as curriculum development, professional training and human resources – duplicate services that Magnolia had reported doing itself.

“Cole-Gutiérrez, the director of L.A. Unified’s charter school division, said the inspector general is reviewing whether to refer the case for criminal prosecution.

“You need to know where the public dollars are going – and they are supposed to be going to students,” he said.

“Magnolia administration is planning to fight the closures with the help of the California Charter School Association, which said in a statement the schools did not receive due process.

“It is troubling that more than 400 families, the majority of whom live in poverty, have very little information about why they have lost their high-performing schools,” California Charter School Association spokesman Jason Mandell wrote in a statement. He complained that L.A. Unified has not released the 2014 audit.

“State law also does not allow the district to conditionally renew a charter, let alone rescind that renewal without presenting its findings or providing the school with the opportunity to correct any issues,” he added.

“Last fall, the group stood behind San Fernando Valley charter school administers facing trial for embezzlement and money laundering. Yevgency “Eugene” Selivanov, founder of Ivy Academia Charter School, was then convicted and sentenced to almost five years in prison.”